7 ms·

Amazon has had, what, five years to expand its Amazon Fresh grocery delivery service? The fact that they have chosen not to implies that they haven't managed to

by thurn 14y ago

Amazon has had, what, five years to expand its Amazon Fresh grocery delivery service? The fact that they have chosen not to implies that they haven't managed to make it cost effective. I think this speaks volumes about the feasibility of grocery delivery.

w1ntermute 14y ago
Yeah, I just don't see grocery delivery becoming feasible until it's done using UAVs. But the main issue with that (aside from getting FAA approval, which is in the works) is that it'll require retrofitting houses with delivery chutes.
- blhack 14y ago
  This isn't as hard as you think. Place an optical indicator (like a QR code), on a piece of paper, and put it where you want the groceries to wind up. Drone finds your house. Finds your landing spot (which was presented to you via a nice "print this" dialog when you ordered), and sets the stuff down. Alternatively, if you're going to be doing this, you can purchase and register an IR beacon that is more permanent than a piece of paper.
  - w1ntermute 14y ago
    It's not that simple. There are a lot of people living in apartments - how's it going to work for them? And where exactly would you place the indicator? In your front yard? Normally, delivieries are made to your porch, but the drone would have difficulty finding an optical indicator on the porch from above. And what about groceries that need to be refrigerated? Those will need to be dealt with specially.
    - aero142 14y ago
      Oh noes, now I only have a business that delivers groceries to people with lawns. What a tiny niche business:) Seriously though, those are really lame problems. If I could sign up for a service that uses a geofence to find out when I get home and then f-ing airlifts milk to the dead center of my front lawn, I would buy so much milk.
    - shasta 14y ago
      Right, refrigeration is one of the big practical problems with UAV grocery delivery... In the foreseeable future, I think you'd have better luck delivering groceries by catapult than by UAV.
- Wingman4l7 14y ago
  I think you're forgetting the limitations of payload and fuel...
lotharbot 14y ago
If Amazon sets up a physical business in any given state, they have to start collecting sales tax on all their sales to that state. So "cost effective" for Amazon Fresh means not just cost effective in isolation, but also accounting for the cost in infrastructure, lost sales, etc. that comes with collecting sales tax. That's one of probably a dozen reasons why what works (or doesn't) for Amazon might be different for Instacart.
apoorvamehta 14y ago
thurn - It does speak volumes. And, if you were to study our model, you would realize that Amazon Fresh and Instacart have very little in common. To start off - we are almost entirely a software company. Amazon Fresh, on the other hand, has warehouses, trucks and they own the inventory - completely different from us. We believe those differences are significant - and hopefully they speak volumes too :)
- minikomi 14y ago
  Sounds like a great blog in the making
InclinedPlane 14y ago
Yes and no. One thing to keep in mind is that Amazon is a highly diversified company. So even if expanding Amazon Fresh to other cities would turn a profit it may not be worth it to them to put resources behind if it won't be able to turn as much profit as, say, expanding amazon proper to other countries (which they're doing) or building out the cloud business, etc.
- danielvinson 14y ago
  My takeaway is that this is not profitable on the global or national scale, but on a local or regional scale, it can be. Amazon might not want to pursue a strategy with limited scalability, whereas Instacart might not even need to worry about that.
greghinch 14y ago
While I agree that Amazon not having much success in this market is not a great sign, it seems like there are probably a number of other reasons they haven't been expanding the service. Amazon is trying to be the one spot you buy all physical goods, but it's been proven time and time again that getting to generalized, or trying to be all things, means you can't do all of them (or sometimes any of them) well. I think a new company with this focus definitely has the best chance of success. At which point, Amazon will probably buy them. For now though, please expand up to Marin!
- frossie 14y ago
  Yes. For example Amazon offers quite a poor consumer experience for clothing and shoes, even if they do sell them. There are reasons why Zappos can thrive (and presumably why Amazon acquired them). [Edit in response to comment below: I do not believe it is right to try something in a store and then go buy it online. Even if you believe that is okay, it actually proves that the purely-online consumer experience is sub-standard, otherwise why bother go to a store at all? While Amazon is great at issuing refunds for, say, non-functioning electronics, they don't issue full refunds if you buy a hat and there's nothing wrong with it but it doesn't quite fit/look right, and you have to pay for return shipping. Contrast this with the Zappos approach where returns are both free, and hassle-free].
  - jmduke 14y ago
    My Amazon experience for clothing and shoes is roughly the same as for all other Amazon products; I visit a physical location to actually peruse/test the product (in this case, try it on) and then order it cheaply online. Do you have specific pain points, or is it the innate difficulty in online shopping for clothes?
    - hkmurakami 14y ago
      >My Amazon experience for clothing and shoes is roughly the same as for all other Amazon products; I visit a physical location to actually peruse/test the product (in this case, try it on) and then order it cheaply online. Because so many of us (including myself) now behave in this manner, I'm fairly convinced that most brick and mortar stores will have to assume an "annual dues" model a la Costco to survive. (and offer some form of competitive advantage over Amazon, of course -- ex: focusing on item discovery rather than cookie cutter merchandise, etc.)
navpatel 14y ago
I used Amazon Fresh when I lived in Seattle & Redmond; and I think this appeals to a different impulse. The key with Instacart is it's (almost) instant, Amazon Fresh is not. The "hey I'm setting up for a bbq, and I need to a couple things from the grocery" is not possible with Amazon Fresh. Whether or not it's a big enough market... I guess they're going to find out!
- jlgreco 14y ago
  I use Amazon Fresh as a "hey, I'm running low on eggs, soap, and paper towels. I don't care what kind I get, I just want more" type service. Works great for that. Also beer. Carrying cases of beer home sucks. ;)
iamgilesbowkett 14y ago
it's a pretty safe bet that a former Amazon employee has a stronger grasp on why Amazon's not made money with this than does some random dude on the web.
yabbadabbadoo 14y ago
Amazon also had years to perfect it's apparel and shoes service. That didn't stop zappos from kicking ass. And look how that turned out. The idea that an incumbent, by default, can't do something because an entrenched giant can't is laughable.
delinka 14y ago
According to CNET, it's not actually a grocery logistics outfit, but a delivery company. They're just delivering groceries ... from the local supermarket. A remote shopping and delivery service, limited currently to groceries. I foresee and expansion into restaurant delivery, too. If it bombs, it won't be because they can't keep the lettuce fresh from the field to your door, it'll be because you just can't do Ultimate Delivery for $99/yr.
nycer2030 14y ago
Are you familiar with FreshDirect? It's an incredibly popular (and profitable) service for grocery delivery in NYC. As the article mentions-- in big cities, this is a viable business.

by thurn 14y ago

w1ntermute 14y ago

Yeah, I just don't see grocery delivery becoming feasible until it's done using UAVs. But the main issue with that (aside from getting FAA approval, which is in the works) is that it'll require retrofitting houses with delivery chutes.

blhack 14y ago
This isn't as hard as you think. Place an optical indicator (like a QR code), on a piece of paper, and put it where you want the groceries to wind up. Drone finds your house. Finds your landing spot (which was presented to you via a nice "print this" dialog when you ordered), and sets the stuff down. Alternatively, if you're going to be doing this, you can purchase and register an IR beacon that is more permanent than a piece of paper.
- w1ntermute 14y ago
  It's not that simple. There are a lot of people living in apartments - how's it going to work for them? And where exactly would you place the indicator? In your front yard? Normally, delivieries are made to your porch, but the drone would have difficulty finding an optical indicator on the porch from above. And what about groceries that need to be refrigerated? Those will need to be dealt with specially.
  - aero142 14y ago
    Oh noes, now I only have a business that delivers groceries to people with lawns. What a tiny niche business:) Seriously though, those are really lame problems. If I could sign up for a service that uses a geofence to find out when I get home and then f-ing airlifts milk to the dead center of my front lawn, I would buy so much milk.
  - shasta 14y ago
    Right, refrigeration is one of the big practical problems with UAV grocery delivery... In the foreseeable future, I think you'd have better luck delivering groceries by catapult than by UAV.
Wingman4l7 14y ago
I think you're forgetting the limitations of payload and fuel...

lotharbot 14y ago

If Amazon sets up a physical business in any given state, they have to start collecting sales tax on all their sales to that state. So "cost effective" for Amazon Fresh means not just cost effective in isolation, but also accounting for the cost in infrastructure, lost sales, etc. that comes with collecting sales tax. That's one of probably a dozen reasons why what works (or doesn't) for Amazon might be different for Instacart.

apoorvamehta 14y ago

thurn - It does speak volumes. And, if you were to study our model, you would realize that Amazon Fresh and Instacart have very little in common. To start off - we are almost entirely a software company. Amazon Fresh, on the other hand, has warehouses, trucks and they own the inventory - completely different from us. We believe those differences are significant - and hopefully they speak volumes too :)

minikomi 14y ago
Sounds like a great blog in the making

InclinedPlane 14y ago

Yes and no. One thing to keep in mind is that Amazon is a highly diversified company. So even if expanding Amazon Fresh to other cities would turn a profit it may not be worth it to them to put resources behind if it won't be able to turn as much profit as, say, expanding amazon proper to other countries (which they're doing) or building out the cloud business, etc.

danielvinson 14y ago
My takeaway is that this is not profitable on the global or national scale, but on a local or regional scale, it can be. Amazon might not want to pursue a strategy with limited scalability, whereas Instacart might not even need to worry about that.

greghinch 14y ago

While I agree that Amazon not having much success in this market is not a great sign, it seems like there are probably a number of other reasons they haven't been expanding the service. Amazon is trying to be the one spot you buy all physical goods, but it's been proven time and time again that getting to generalized, or trying to be all things, means you can't do all of them (or sometimes any of them) well. I think a new company with this focus definitely has the best chance of success. At which point, Amazon will probably buy them. For now though, please expand up to Marin!

frossie 14y ago
Yes. For example Amazon offers quite a poor consumer experience for clothing and shoes, even if they do sell them. There are reasons why Zappos can thrive (and presumably why Amazon acquired them). [Edit in response to comment below: I do not believe it is right to try something in a store and then go buy it online. Even if you believe that is okay, it actually proves that the purely-online consumer experience is sub-standard, otherwise why bother go to a store at all? While Amazon is great at issuing refunds for, say, non-functioning electronics, they don't issue full refunds if you buy a hat and there's nothing wrong with it but it doesn't quite fit/look right, and you have to pay for return shipping. Contrast this with the Zappos approach where returns are both free, and hassle-free].
- jmduke 14y ago
  My Amazon experience for clothing and shoes is roughly the same as for all other Amazon products; I visit a physical location to actually peruse/test the product (in this case, try it on) and then order it cheaply online. Do you have specific pain points, or is it the innate difficulty in online shopping for clothes?
  - hkmurakami 14y ago
    >My Amazon experience for clothing and shoes is roughly the same as for all other Amazon products; I visit a physical location to actually peruse/test the product (in this case, try it on) and then order it cheaply online. Because so many of us (including myself) now behave in this manner, I'm fairly convinced that most brick and mortar stores will have to assume an "annual dues" model a la Costco to survive. (and offer some form of competitive advantage over Amazon, of course -- ex: focusing on item discovery rather than cookie cutter merchandise, etc.)

navpatel 14y ago

I used Amazon Fresh when I lived in Seattle & Redmond; and I think this appeals to a different impulse. The key with Instacart is it's (almost) instant, Amazon Fresh is not. The "hey I'm setting up for a bbq, and I need to a couple things from the grocery" is not possible with Amazon Fresh. Whether or not it's a big enough market... I guess they're going to find out!

jlgreco 14y ago
I use Amazon Fresh as a "hey, I'm running low on eggs, soap, and paper towels. I don't care what kind I get, I just want more" type service. Works great for that. Also beer. Carrying cases of beer home sucks. ;)

iamgilesbowkett 14y ago

it's a pretty safe bet that a former Amazon employee has a stronger grasp on why Amazon's not made money with this than does some random dude on the web.

yabbadabbadoo 14y ago

Amazon also had years to perfect it's apparel and shoes service. That didn't stop zappos from kicking ass. And look how that turned out. The idea that an incumbent, by default, can't do something because an entrenched giant can't is laughable.

delinka 14y ago

According to CNET, it's not actually a grocery logistics outfit, but a delivery company. They're just delivering groceries ... from the local supermarket. A remote shopping and delivery service, limited currently to groceries. I foresee and expansion into restaurant delivery, too. If it bombs, it won't be because they can't keep the lettuce fresh from the field to your door, it'll be because you just can't do Ultimate Delivery for $99/yr.

nycer2030 14y ago

Are you familiar with FreshDirect? It's an incredibly popular (and profitable) service for grocery delivery in NYC. As the article mentions-- in big cities, this is a viable business.